What Does Dell Want With A New Data centre?

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Photo: Wikimedia

Dell has spent $3.6 million to acquire land in rural Washington that the company plans to use for a new data centre, according to a report in the Wenatchee World. The deal could signal a bigger push into hosting for Dell, upping the ante in its competition with IBM and HP.The land is in Quincy, home to Microsoft’s first massive data centre, which was built in 2007 and is expanding this year. Yahoo also operates a data centre nearby, and Google has a big one a couple hundred miles to the south in The Dalles, Oregon. Companies are drawn to the region for its cheap land and hydroelectric power, which is used not only to power the servers but also to cool them–the largest expense by far in most data centres.

The Washington state legislature also passed a law earlier this spring offering tax breaks on big data centres in rural parts of the state.

It’s obvious why Microsoft and Google own big data centres–running search and e-mail for millions of customers requires a lot of infrastructure.

But so far, Dell mostly sells hardware and software for companies to build and run their own data centres. That’s what last summer’s acquisitions of Ocarina and Scalent, and its failed bid for 3PAR, were about.

The data centre build-out could signal a bigger focus on its own hosted services. This lets Dell go to customers with a mix-and-match approach: they’ll sell you the hardware, software, and consulting services to build your own data centre, and will host the parts you want to offload. This week’s acquisition of Boomi also makes more sense if Dell’s going to be upping its own cloud services.

Dell’s competitors are already spending big bucks on data centres. Earlier this summer, HP announced it would incur $1 billion in expenses for consolidating a bunch of data centres it gained in its acquisition of EDS. Some of that will include building out new data centres. IBM also offers an array of hosted services as part of its cloud computing practice, and runs hundreds of data centres worldwide, including a big new one it opened in North Carolina in February.

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